25+ Crucial Average Cost Per Hire Facts [2026]: All Cost Of Hiring Statistics

Research Summary. The process of hiring employees with the right skills and qualifications is crucial for the sustained success and profitability of almost every business in the U.S. However, understanding the average cost to hire an employee is a significant factor in the hiring process. Following comprehensive research, our data analysis team has revealed:

• The average cost per hire is $4,700.

• It takes 36 to 42 days on average to fill a position in the United States.

• 15% of Human Resources expenditures are dedicated to recruitment activities.

• Hiring a new employee, including benefits, can cost up to 40% of their base salary.

• 63% of hiring managers and talent acquisition professionals believe that AI has positively impacted their recruitment processes.

• On average, it takes three to eight months for a new employee to reach full productivity.

For further insights, we categorized the data as follows:
Demographics | Recruitment | Trends | New Hires

General Cost of Hiring Statistics

• In the United States, the median cost per hire is $1,633.

  The median cost per hire is $2,792 less than the average cost per hire of $4,700, indicating that certain positions can be significantly more expensive to fill, thus skewing the average.

  To provide context, 75% of hires cost less than $4,669. Conversely, hiring an executive averages $14,936 with a median cost of $5,000. These higher-tier roles account for a disproportionate share of hiring expenses.

Average and Median Cost Per Hire for Executive and Non-Executive Positions

	25th Percentile	Median	75th Percentile	Average
Non-executive cost per hire	$500	$1,633	$4,669	$4,700
Executive cost per hire	$1,300	$5,000	$18,000	$14,936

• A vacancy in a company costs, on average, about $98 per day.

  Over a typical 42-day hiring period, the average vacancy costs employers approximately $4,129, equating to over $98 daily, in addition to recruitment expenses.

• Benefits typically cost employers 25% to 40% of a new employee’s base salary.

  Salary and benefits packages can amount to 1.25 to 1.4 times the base salary. Thus, for an employee earning $50,000 annually, benefits could add an extra $12,500 to $20,000 yearly.

• In small companies nationwide, the average training cost is $1,105 per employee annually.

  Small businesses (100 to 999 employees) invest more than $1,000 per employee in training each year, which is $658 more than large companies.

  In contrast, large companies (10,000+ employees) spend approximately $447 per employee, while midsize companies (1,000 to 9,999 employees) allocate around $545.

  Average Training Cost Per Employee

  Business Size	Average Training Cost Per Employee
  Small (100-999 employees)	$1,105
  Midsize (1,000 to 9,999 employees)	$544
  Large (10,000+ employees)	$477
  All Companies	$702

  These training costs encompass both structured training expenses and the time devoted by managers and employees to train new hires.

• It can take up to six months for a company to recoup the investment made on a new hire.

  Data suggests that it takes nearly six months for businesses to break even after hiring a new mid-level employee. Additionally, new hires usually don’t achieve their full productivity until they have been on the job for over 12 consecutive weeks.

Cost Per Hire Demographic Statistics

• The cost of hiring and onboarding an entry-level employee is estimated to be 180% less than that of an executive-level hire.

  Hiring an entry-level employee typically costs about 20% of their salary, while mid-level employees average around $60,000 in hiring costs (1 to 1.5 times their salary).

  In contrast, hiring costs for executive positions can exceed 200% of the new hire’s salary.

• Depending on the industry, hiring can take anywhere from 10 to 60 days.

  Public sector hiring generally takes about 60 days, while hiring for hospitals or nonprofits averages around 30 days. The private sector typically sees hiring times of about 20 days, and franchise openings can be filled in as little as 10 days.

  

  Hiring times also vary significantly by region. For instance, average hiring durations were 34.4 days in Washington, D.C., 25.3 days in Portland, Oregon, and 18.6 days in Miami, Florida.

• Internal HR teams can significantly raise a company’s cost per hire.

  Research indicates that internal HR teams can inflate hiring costs by 50% or more. For instance, an internal HR recruiter with a salary of $51,000 can increase hiring costs by at least $4,250 each month.

• Most companies utilize reference checks for screening candidates at all levels during the recruitment process.

  Companies conduct reference checks 74% of the time for executive and middle management candidates, 69% of the time for non-management candidates, and 65% for non-management hourly or non-exempt candidates.

  Other common screening methods include one-on-one interviews, phone screenings, behavioral interviews, in-person assessments, group interviews, and behavioral interviews, which are employed 68% to 54% of the time by hiring managers and recruiters.

Recruitment Statistics

• Executive search firms, in-house recruiters, and industry associations are the primary tools for sourcing executive candidates.

  Research reveals that 49% of firms use headhunters or executive search firms for recruitment, 28% use in-house recruiters, and 23% leverage industry associations.



• 73% of companies in the U.S. employ talent acquisition software.

  The majority of U.S. businesses utilize talent acquisition software to streamline recruitment processes, enhance hiring efficiency, and improve onboarding experiences.

• Company websites, employee referrals, and free job boards are among the most widely used recruitment methods.

  85% of surveyed companies recruit new employees through their own websites, 90% through referrals from current employees, and 71% through free job boards.

  Top Recruitment Methods in the U.S.

  Recruitment Method	Percentage of Companies That Use That Method
  Current Employee Referrals	90%
  Company Website	85%
  Free Job Boards	71%

• In most U.S. businesses, recruitment is managed by HR generalists.

  About 48% of HR generalists handle recruitment for non-executive job openings, while 32% manage recruitment for executive roles.

  For non-executive roles, recruitment is conducted by in-house recruiters 25% of the time, hiring managers 16% of the time, and third-party recruiters or staffing agencies 3% of the time.

Recruitment Trends and Predictions

• The adoption of artificial intelligence in recruitment is rapidly increasing across the U.S.

  Recent studies indicate that 96% of hiring managers believe AI can enhance recruitment and the overall hiring process.

  As AI utilization in HR departments escalates, it mainly focuses on improving talent acquisition and retention through better sourcing, screening, hiring, and onboarding processes.

• The HR outsourcing sector is projected to grow at an annual rate of 4.9% in the coming years.

  The HR outsourcing market is expected to reach approximately $45.8 billion by 2027, reflecting a $13 billion increase from its 2020 valuation of $32.8 billion, indicating nearly 5% growth.

• Identifying the right candidates within high-demand talent pools is one of today’s most significant recruiting challenges.

  46% of hiring managers report that sourcing qualified candidates from high-demand talent pools is a major challenge, alongside issues related to compensation and competition.

• Most recruiters and hiring managers in the U.S. utilize software during the recruitment process.

  The popularity of recruitment software is rising; currently, 51% of hiring managers use interview scheduling software to streamline recruitment, with 26% considering its implementation.

New Hire Statistics

• Productivity rates for new employees average around 25% during their first month.

  New hires typically operate at a 25% productivity rate during their initial month post-training, which increases to 50% in the second month and 75% in the third month.

• Employees may take three to eight months to achieve full productivity.

  In most professional fields, experts estimate that it can take close to a year for new hires to reach their full productivity.

• A poor hiring decision could cost a company up to 300% of the employee’s salary.

  According to Harvard Business Review data, turnover costs can range from 100% to 300% of the salary of the replaced employee. With approximately 23% of new hires leaving before completing their first year, hiring the wrong candidate can quickly become financially burdensome.

• Companies can incur losses of $15,000 or more when an employee departs within the first year.

  As reported by Employee Benefits News, companies that hire a full-time employee with a $45,000 annual salary can lose around $15,000 if that employee leaves within a year. This loss can escalate to at least 33% of the annual salary for higher-paid employees.

Average Cost Per Hire FAQ

1. What is cost per hire?

   Cost per hire refers to the average amount a business spends when hiring a new employee. This metric encompasses all HR and recruitment expenses, including advertising, software, and salaries, involved in the onboarding process.

   Monitoring cost per hire is crucial for companies to budget their recruiting expenses, assess their hiring processes, and refine their recruitment strategies.

2. How do you calculate cost per hire?

   To calculate cost per hire, divide the total number of hires during a specific period by the total recruitment costs in that same timeframe. In simple terms:

   Cost Per Hire = Total Recruitment Cost / Total Number of Hires

   Your total recruitment cost should include both internal and external recruiting expenses.

3. What’s included in internal recruiting costs?

   Internal recruiting costs typically encompass at least six factors:

   • Candidate assessment expenses

   • Employer branding initiatives

   • Internal recruiter salaries

   • Pro-rated salaries of hiring managers

   • Travel costs associated with recruitment

   • Employee referral bonuses

   Internal recruitment costs are often the most significant.

4. What’s included in external recruiting costs?

   External recruiting costs also encompass at least six components:

   • Job advertisement expenses

   • Fees for external recruiters

   • Recruiting agency charges

   • Staffing agency fees

   • Recruitment software costs

   • Costs related to recruitment events

5. What’s a good benchmark for cost per hire?

   A reasonable benchmark for cost per hire ranges between $3,000 and $5,000. However, this can vary significantly based on the size and type of business.

   The national average cost per hire is currently $4,700. Various factors influence a company’s cost per hire, including industry, company size, and the nature of the role being filled.

6. What is a good cost per applicant?

   A good cost per applicant is approximately $12. This figure represents the average expense to attract a job seeker and prompt them to apply. While this cost rose to nearly $20 during the pandemic, it is gradually returning to pre-pandemic levels.

7. What’s included in a recruiting budget?

   A comprehensive recruiting budget includes eight essential elements:

   • Job board/advertisement fees

   • Applicant tracking system software fees

   • Recruiter compensation

   • Internal HR expenses

   • Branding, promotion, and social media costs

   • Pre-employment screening and/or testing costs

   • Referral bonuses

   • Travel reimbursements

8. How much does it cost to advertise a job?

   Job advertising typically costs between $0.10 and $5.00 per click. Most job posting platforms utilize a pay-per-click model, charging only when a candidate expresses interest by clicking on the advertisement.

   Some platforms offer maximum spending limits, halting the advertisement once a predetermined number of clicks is reached, allowing for budget management. However, specialized job postings, particularly for highly skilled roles, may incur higher costs.

9. Is cost per hire important?

   Yes, understanding your cost per hire is crucial. However, prioritizing investment in top talent is more critical than simply aiming for the lowest hiring costs.

   In addition to tracking your average cost per hire, it’s vital to develop metrics to evaluate the performance of new hires. Acknowledge that filling senior-level positions will inherently cost more than entry-level roles and recognize the value of promoting existing talented employees.

Conclusion

Effective hiring and onboarding processes are vital to a business’s success and sustainability across various industries in the U.S. With the national average cost per hire at approximately $4,700, understanding these hiring statistics is essential for minimizing recruitment costs and enhancing revenue and profitability.

In the U.S., it typically takes between 36 and 42 days to secure a new hire, making it clear why many companies dedicate around 15% of their HR budgets to recruitment efforts. While these efforts can be significant, sometimes exceeding 40% of an employee’s base salary, attracting and retaining high-quality employees is paramount.

With the growing integration of artificial intelligence in the hiring process, the future of recruitment appears promising. This technological advancement is likely to further reduce HR costs while facilitating quicker access to qualified candidates.

References

1. SHRM. “SHRM Customized Talent Acquisition Benchmarking Report.” Accessed on August 19, 2021.

2. SHRM. “The Real Costs of Recruitment.” Accessed on September 6, 2022.

3. Johnson Service Group. “Are You Aware Of The Cost Of Vacancies?” Accessed on August 19, 2021.

4. Investopedia. “The Cost Of Hiring A New Employee.” Accessed on August 19, 2021.

5. Harvard Business Review. “Technology Can Save Onboarding From Itself.” Accessed on August 20, 2021.

6. Forbes. “The Cost Of Turnover Can Kill Your Business And Make Things Less Fun.” Accessed on August 20, 2021.

7. PR Newswire. “Global Human Resource Outsourcing (HRO) Industry.” Accessed on August 20, 2021.

8. Ideal. “The Rise Of AI In Talent Acquisition.” Accessed on August 20, 2021.

9. Yello. “Real Recruiters Share How HR Tech Has Helped Them Win The War On Talent.” Accessed on August 20, 2021.

10. The Hire Talent. “Hiring Costs At Every Level.” Accessed on August 21, 2021.

11. SHRM. “Average U.S. Hiring Time Increased By 10 Days Since 2010.” Accessed on August 21, 2021.

12. Business Wire. “It Can Take Eight Months Before New Starters Become Productive at Work.” Accessed on February 16, 2023.

Author

Elsie Boskamp

Elsie is an experienced writer, reporter, and content creator. As a leader in her field, Elsie is best known for her work as a Reporter for The Southampton Press, but she can also be credited with contributions to Long Island Pulse Magazine and Hamptons Online. She holds a Bachelor of Arts degree in journalism from Stony Brook University and currently resides in Franklin, Tennessee.